A bunker fuel and oil report, detailing the day per day trading patterns and prices in the market.The report is prepared from OW Risk Management and covers all major bunker fuel oil markets around the world, including all major ports, ranging from Singapore to Rotterdam.

Market in Brief

Friday night, the market received bullish news on the back of global Oil demand gains. WTI advanced settling at $97.65, 0.3% higher. China’s net oil imports rose 19 percent to 5.73 million barrels a day last month, climbing from the lowest level in 14 months, data from the Beijing-based General Administration of Customs showed yesterday. The US will account for about 21% of Global Oil demand  this year and China for 11%. In addition, a strong job report in the US with job creation exceeding 200k again and the unemployment rate falling to 7% last month helped the positive sentiment. On the less bright side, Japans growth slowed more than initially estimated in the 3rd quarter to 1,1% from 1,9% expected. Weaker Business spendíng  contributed to the downward revision in the GDP report. Brent settled at $111.61 bbl , after rallying to a high of $112.

Fueloil Specifics

Beginning of last week, demand for bunker fuel in Singapore was heard to be modest, but renewed buying interest for fuel oil in China and a slight uptick in bunker fuel demand gave some strength during Thursday and Friday last week. The demand has picked up now as cash differentials for 380cst, which was assessed at a premium of $3.25/mt on December 2 fell to a discount of minus $1.08/mt at Thursday Asian close. Delivered 380cst Friday where heard to be offered between $591/mt to $601/mt depending on volume and vessel.  FO swaps retreated during the window together with crack. Northwest Europe was hit by athe storm Thursday/Friday last week and fuel loadings in many ports experienced delays. In Rotterdam supply remains tight but better supply is expected from next week on.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Jan Feb Mar Q114 Q214 2014 NYMEX WTI Swap (1st month) 0,27 97,65 ↑ 97,99 97,94 97,61 97,85 96,52 95,20 ICE Brent Swap (1st month) 0,63 111,61 ↓ 110,94 110,66 110,65 110,37 109,71 108,77 ICE Gasoil Swap (1st month) (3,00) 940,75 ↓ 944,42 943,75 941,17 943,11 936,64 933,40 3.5% Barges FOB Rtdm 0,00 578,50 ↑ 585,75 587,50 588,50 587,25 589,75 588,50 3.5% Cargoes FOB Med 1,00 569,00 ↑ 582,50 584,00 585,00 583,75 586,25 586,25 1.0% Cargoes FOB NWE (4,75) 611,50 ↑ 609,00 611,25 612,50 611,00 614,25 612,25 3% no. 6 USGC WB 0,41 91,96 ↑ 92,00 91,75 92,00 92,00 92,25 92,00 380 CST Cargoes FOB S'pore (2,50) 602,75 ↑ 608,60 608,60 608,35 608,60 609,35 609,60 0.1 % GO Barges FOB Rtdm (3,50) 939,50 ↑ 945,25 945,25 942,25 944,25 937,25 933,25 Physical Rotterdam 380 CST 0,00 584,00 ↑ 591,00 592,75 593,75 592,50 595,00 593,75 Physical Singapore 380 CST (1,75) 608,75 ↑ 613,85 613,85 613,60 613,85 614,60 614,85

Focus of the day: Gibraltar

The three ports in the Gibraltar Strait are having a smooth start of the week with bunker deliveries taking place within schedule by most suppliers except for two who are facing some delays while loading barges. Bunker premiums today seem a bit lower than those seen by the end of last week. The Rdam-Med spread keeps narrowing to a 1.5 usd/mt. The HILO remains stable at last weeks levels, currently at 51 usd/mt in the Med, with the CIF Med 1% premium over FOB NWE 1% on 19 usd/mt. The Med market is trading up this morning and demand seems to be picking up today after the national holiday in Spain last Friday.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Low 10-Dec 10:00 AM Oct 0,3% 0,4% - Treasury Budget Medium 11-Dec 2:00 PM Nov - -$172,1B - Initial Claims High 12-Dec 8:30 AM 07-dec 315K 298K - Continuing Claims High 12-Dec 9:30 AM 30-nov 2750K 2744K - Retail Sales High 12-Dec 9:30 AM Nov 0,6% 0,4% - Bussiness Inventories Medium 12-Dec 10:30 AM Oct 0,3% 0,6% - PPI Medium 13-Dec 8:30 AM Nov 0,1% 0,1% -

Source: OW Risk Management